Arizona Lawmaker Wants to Stop Homeowners Walking Away

A Republican lawmaker in Arizona is attempting to scrap a law in the state that lets homeowners walk away from their home when it’s underwater, claiming that the rule is unfair on banks, reports MyFoxPhoenix.com.

Jack Harper told MyFoxPhoenix that his proposal would only affect future mortgages should it come into effect, meaning that current homeowners considering walking away would be unaffected by the proposal.

According to Harper, the rules are unfair on banks, as they are not allowed to go after anyone who forecloses on their home to recoup their losses. He claimed that about one third of all foreclosures in the state could have been avoided, as the homeowners were actually in a position to pay off their mortgage but instead chose not to do so.

Harper claims that the measures are necessary to prevent another economic downturn happening in Arizona in the future.

However, not everyone agrees with the statements made by Harper. Tom Farley, of the Arizona Association of Realtors, said that the new law could end up doing more harm than good. He says that there is no evidence to suggest that the law would dissuade homeowners from walking away from their underwater mortgages, while pointing out that the law serves as a protection for consumers who need to recover their credit records. Taking homeowners to the bankruptcy court would also do nothing to help the country’s economic recovery – rather it would compound these problems.

Apparently, Mr. Harper tried to take up the issue once before, only to repeal his proposals after major flaws were found.